SOKAN(SH:688157)2021-04-29 16:00Financial Performance - The company's operating revenue for 2020 was approximately RMB 434.93 million, a decrease of 4.44% compared to RMB 455.14 million in 2019[21]. - The net profit attributable to shareholders for 2020 was approximately RMB 87.18 million, down 6.13% from RMB 92.87 million in 2019[21]. - The net profit excluding non-recurring gains and losses was approximately RMB 75.66 million, a decline of 16.80% compared to RMB 90.93 million in 2019[21]. - The cash flow from operating activities for 2020 was approximately RMB 71.75 million, a slight decrease of 1.06% from RMB 72.52 million in 2019[21]. - The total assets at the end of 2020 reached approximately RMB 1.24 billion, an increase of 117.70% from RMB 570.79 million at the end of 2019[21]. - The net assets attributable to shareholders increased to approximately RMB 1.10 billion, a significant rise of 173.91% from RMB 399.88 million at the end of 2019[21]. - Basic earnings per share decreased by 19.23% to CNY 1.26 compared to CNY 1.56 in the previous year[22]. - The weighted average return on equity fell by 6.72 percentage points to 19.45% from 26.17% in the previous year[23]. - The company's gross profit margin decreased by 3.79% year-on-year, primarily due to the reclassification of transportation costs into operating costs[125]. - The production volume of coatings decreased by 11.10% year-on-year, while sales volume decreased by 2.40%[127]. Research and Development - R&D expenditure as a percentage of operating income increased by 2.23 percentage points to 12.07%[23]. - The company has increased its R&D investment to enhance its innovation capabilities, focusing on developing customized functional coating materials to meet the evolving demands of high-end consumer electronics and automotive products[58]. - The company has received multiple new patents during the reporting period, including 2 for organic silicon feel coating technology and 2 for automotive anti-fog resin and coating technology, indicating its strong R&D capabilities[61]. - Total R&D expenses increased by 17.31% year-over-year, reaching ¥52,515,717.66, compared to ¥44,766,130.26 in the previous year[69]. - The company has established provincial-level research and technology platforms, including the "Hunan Province UV Polymer Coating Engineering Technology Research Center" and the "Hunan Province Recognized Enterprise Technology Center" to support its R&D efforts[56]. - The company has 48 ongoing R&D projects, covering various fields such as automotive parts coatings and water-based coatings, ensuring a strong pipeline for future product launches[86]. Market Position and Strategy - The company aims to expand its market presence in North America, targeting large consumer electronics clients with innovative coating solutions[35]. - The company has established itself as a major supplier of coating products for six leading smartphone brands, including Google, MOTO, Huawei, Xiaomi, and VIVO, in the North American consumer electronics market[55]. - The company is focusing on high-end consumer electronics and automotive coatings, with a strategy to deepen customer relationships and expand market share[158]. - The company aims to enhance its market position by expanding into the automotive coating sector and leveraging its core innovative products[156]. - The company plans to implement a three-in-one product strategy, integrating coatings, inks, and adhesives to meet diverse customer needs and enhance market competitiveness[162]. Corporate Governance and Compliance - The company has not engaged in any non-operating fund occupation by controlling shareholders or related parties[7]. - There are no violations of decision-making procedures regarding external guarantees[7]. - The company has received a standard unqualified audit report from Tianzhi International Accounting Firm[4]. - The board of directors and management confirm the accuracy and completeness of the annual report[5]. - No special arrangements for corporate governance are applicable[8]. - The company has established a clear timeline for compliance with share transfer commitments to protect investor interests[176]. Sustainability and Environmental Initiatives - The company is prioritizing sustainability by developing eco-friendly coating materials, aligning with industry trends towards greener products[34]. - The company is focusing on low VOC UV paints, with a total investment of ¥1,200,000, to meet the latest environmental regulations[74]. - The company is committed to developing environmentally friendly coating materials in response to stricter regulatory policies and increasing consumer demand[155]. Dividend Policy - The company plans to distribute a cash dividend of RMB 3.30 per 10 shares, totaling RMB 26,268,000, which represents 30.13% of the net profit attributable to shareholders for 2020[5]. - The company will maintain a consistent and stable profit distribution policy, considering industry characteristics and competitive factors[169]. - The company implemented a cash dividend policy, prioritizing cash distribution, with a minimum of 30% of the average distributable profit over the last three years to be distributed in cash if no major investment plans arise[167][169]. Risks and Challenges - The company has outlined various operational risks in the report, urging investors to be cautious[4]. - The company faces risks related to market demand fluctuations, particularly in high-end consumer electronics and passenger vehicle sectors, which could impact its financial performance[110]. - The company faces intensified market competition, particularly from international chemical giants, which may impact its profitability[115].